TY - JOUR
AU - Edwards,Sebastian
TI - Capital Flows, Foreign Direct Investment, and Debt-Equity Swaps in Developing Countries
JF - National Bureau of Economic Research Working Paper Series
VL - No. 3497
PY - 1992
Y2 - May 1992
DO - 10.3386/w3497
UR - http://www.nber.org/papers/w3497
L1 - http://www.nber.org/papers/w3497.pdf
N1 - Author contact info:
Sebastian Edwards
UCLA Anderson Graduate School of Business
110 Westwood Plaza, Suite C508
Box 951481
Los Angeles, CA 90095-1481
Tel: 310/206-6797
Fax: 310/206-5825
E-Mail: sebastian.edwards@anderson.ucla.edu
M2 - featured in NBER digest on 1991-01-01
AB - One of the nest serious consequences of the debt crisis of 1982 has been the reduction in the accessibility to the world capital market for most developing countries. This situation has proved to be particularly serious for Latin American nations. At this juncture, a key question is how to improve the LLCs attractiveness for foreign capital flows. In this paper I explore the role of two potential sour of additional private capital inflows: increased direct foreign investment, and the debt-conversion mechanisms. The paper presents the results from an economic analysis of the determinants of the cross-country distribution of the OECD direct foreign investment (DFI) into the LDCs. Particular emphasis is given to assessing the relative importance of political variables of the recipient countries. The role of the debt-equity swaps as investments for reducing the extreme debt burden is also investigated, using the recent Chilean experience with these mechanisms as a case-study.
ER -